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Environmental, science groups support Administration efforts to determine the costs of carbon pollution

February 26, 2014

Contact:

Sharyn Stein, 202-572-3396, sstein@edf.org

Edna Ishayik, 212-998-6085, ednai@nyu.edu

Jake Thompson, 202-289-2387, jthompson@nrdc.org

(February 26, 2014) — The
Obama Administration has arrived at a scientifically sound estimate for the
rising costs of carbon pollution, according to Environmental Defense Fund (EDF)
Institute for Policy Integrity (Policy Integrity) Natural Resources Defense
Council (NRDC) and Union of Concerned Scientists.

The groups jointly
submitted public
comments to the White House Office of Management
and Budget (OMB) in support of using the “social cost of carbon” to estimate
climate change-related economic damages.

“The Obama
Administration has provided strong leadership with an initial, sound
calculation for how much carbon pollution costs the public,” said Laurie
Johnson, NRDC’s Chief Economist. “The careful analysis this administration has
undertaken is an important contribution to understanding the economic stakes of
climate change.”

More wildfires,
flooding, and the spread of infectious diseases are some of the risks of a
warming planet. These kinds of disasters would impose costs of hundreds of
billions of dollars onto the public. Individuals and governments would pay for
even a small rise in global temperatures through increased food prices,
insurance premiums, doctors’ bills, and emergency aid.

The social cost of
carbon aims to estimate some of the damages caused by each ton of carbon
dioxide emitted into our air. It uses cutting-edge research and economic
modeling to place a monetary value on climate risks (as well as potential
benefits like lower heating costs).

The joint comments submitted
today are in response to OMB’s request for feedback on the government’s social cost of carbon, which is
currently set at $37 per ton of carbon dioxide emissions. The groups say that is
a scientifically sound estimate that captures many of the economic threats of a
warming planet.

“Climate change is a
threat to public health and safety, but it’s also a threat to our economy.
We’ve known that climate change carries huge financial risks, but we’re just
beginning to calculate the actual amount – to total up the bill for our carbon
pollution,” said Gernot
Wagner, EDF senior economist. “The social cost of carbon is an impressive
effort to determine the true economic consequences of climate change.”

The comments also
recommend improvements to the estimate that would incorporate additional
climate-caused damages. Examples include the interrelated risks of pests,
pathogens, and air pollution -- and their effects on food prices, insurance
premiums and health care costs.

“Extreme weather events
such as Superstorm Sandy, summer wildfires in Colorado, and widespread drought
have given us a glimpse of what climate change could cost,” said Richard
Revesz, Policy Integrity’s Director. “But the government’s estimate of climate
damage hasn’t yet incorporated all of these costs. The Obama Administration
should continue its rigorous work to evaluate these risks and include more of them
into its social cost of carbon estimate.”

To avoid unfairly
draining the pocketbooks of the next generations, the joint comments also
suggest using a lower “discount rate.” The government’s current discount rate
is inconsistent with the developing consensus among economists that the
appropriate rate should be much lower.

Three of the groups (EDF,
Policy Integrity, and NRDC) also unveiled the beta version of a new website today — part of their Cost of Carbon Pollution project. The project
will marshal the best economic research to report on the price of climate
change threats. A series of papers and blog posts will quantify the costs to
the public of wildfires, storm surges, and other consequences of a rise in
global temperatures. The site will also
serve as a hub for academics who research this topic, offering a clearinghouse
of scientific and economic research.

In March, the website will
add an inaugural report titled Omitted
Damages: What’s Missing from the Social Cost of Carbon. The report will take
a deeper look at the government’s $37 per ton estimate and some of the costs of
climate change not currently included in the estimate.

The groups’ joint
comments to OMB can be read here or, on
EDF’s website, here. The beta version of the Cost of Carbon Pollution
website can be found here.

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Environmental
Defense Fund (edf.org), a leading national nonprofit organization, creates
transformational solutions to the most serious environmental problems. EDF
links science, economics, law and innovative private-sector partnerships.
Follow us on Twitter @EnvDefenseFund

The Institute for Policy Integrity at New York University School
of Law (policyintegrity.org) is a non-partisan think-tank using economics and
law to protect the environment and public health. Follow us on Twitter
@PolicyIntegrity

The Natural Resources Defense Council (nrdc.org) is an
international nonprofit environmental organization with more than 1.4 million
members and online activists. Since 1970, our lawyers, scientists, and other
environmental specialists have worked to protect the world's natural resources,
public health, and the environment. NRDC has offices in New York City, Washington,
D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, and Beijing. Follow us
on Twitter @NRDC